Strong Easter buoys British Airways owner IAG despite rising fuel costs
A strong Easter buoyed British Airways owner IAG, pushing its shares higher as it shrugged off the pressure of surging fuel costs.
IAG exceeded forecasts as it recorded a 19% jump in pre-tax profits to 921 million euros (£843 million) for the three months to June.
During the quarter, the airline group saw passenger unit revenues rise 1.1% as it was aided by the timing of Easter.
The company also saw passenger revenues surge for the half-year, with revenues rising 7.2% to 10.6 billion euros (£9.7 billion) over the first six months of 2019.
IAG’s results were announced as a potential pilots’ strike threatens to disrupt its earnings over the rest of the summer.
Earlier this week, British Airways said fresh talks would take place in a bid to stop the industrial action over a pay dispute after the airline lost a legal challenge.
On Friday, the company highlighted a solid sales performance, which came despite rising cost pressures across the air travel sector.
IAG chief executive Willie Walsh said: “Despite fuel cost headwinds, we delivered a good performance.
“At constant currency, fuel unit costs were up 6.3% while passenger unit revenue increased 1.1%, benefiting from the timing of Easter.
“This highlights, once again, that our unique structure and diverse brand portfolio underpins our financial resilience and ability to deliver robust results.”
Mr Walsh added that the firm was yet to allocate funds to pay the £183 million fine it was issued by UK information commissioner over a data breach last year.
IAG held firm on profit forecasts for 2019 and said it expects passenger unit revenue to improve over the rest of the year.
Analysts at Liberum described the quarterly figures as “encouraging” and said its growth in passenger revenues “look better than the peer group”.
Shares in IAG rose by 2.5% to 423.7p in early trading on Friday.